Goldman’s deep pockets unfazed by fraud case
(20 April 2010 – USA) Goldman Sachs chief executive officer is expected to unveil a ‘compensation’ pay-pot of around US$5 billion (A$5.44 billion) later this week, amidst fraud allegations and possible reimbursement repercussions.
The bank is also expected to announce total revenues for the first quarter of US$11 billion, up from US$49.4 billion for the corresponding period in 2009.
Around 47 percent of that is expected to fill the ‘compensation pool’ for the investment bank’s executives and fellow employees.
Amid widespread anger against the banks, Goldman last year shrank its bonus pool to 36 percent of revenues rather than the usual 50 percent.
Despite the tightening of the purse strings the bank still paid out a total of $US16.2 billion.
Mr Blankfein was awarded a US$9 million bonus in shares in 2009, down from the US$68 million he received in cash, shares and options in 2007.
Due to accounting rules, Goldman sets aside a higher proportion of revenues for staff rewards at the start of the year. The rate at which they are accruing for 2010 overall is likely to drop in subsequent quarters, and should end up at about the same as in 2009.
The bank is currently under investigation by the Securities and Exchange Commission for civil fraud as a result of selling mortgage related investments to clients without disclosing that they were created with input from a client who was betting on them to fail.
Around 47 percent of that is expected to fill the ‘compensation pool’ for the investment bank’s executives and fellow employees.
Amid widespread anger against the banks, Goldman last year shrank its bonus pool to 36 percent of revenues rather than the usual 50 percent.
Despite the tightening of the purse strings the bank still paid out a total of $US16.2 billion.
Mr Blankfein was awarded a US$9 million bonus in shares in 2009, down from the US$68 million he received in cash, shares and options in 2007.
Due to accounting rules, Goldman sets aside a higher proportion of revenues for staff rewards at the start of the year. The rate at which they are accruing for 2010 overall is likely to drop in subsequent quarters, and should end up at about the same as in 2009.
The bank is currently under investigation by the Securities and Exchange Commission for civil fraud as a result of selling mortgage related investments to clients without disclosing that they were created with input from a client who was betting on them to fail.
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